Brazil Bars Oil Workers From Leaving After Spill

Work was ended at Chevron’s platform on the Frade field after a leak was found Friday.Credit
Marcia Foletto/Agence France-Presse — Getty Images

RIO DE JANEIRO — A Brazilian court has ordered 17 employees from two American companies, the oil giant Chevron and the rig operator Transocean, to surrender their passports, barring them from leaving Brazil as authorities prepare to file criminal charges in days in connection with an offshore oil spill involving the companies.

The ruling by Judge Vlamir Costa Magalhães, issued late Friday night, adds to Chevron’s woes in Brazil, which began last November when oil was found to be leaking from an offshore field controlled by Chevron. Prosecutors have already filed a civil lawsuit seeking damages of 20 billion reais, or about $11.2 billion, from the company.

Brazil’s Navy and Chevron said Friday that they had detected a new oil sheen from the field where the earlier spill occurred.

Chevron’s legal battle here points to the risk involved in Brazil’s plans to tap its huge offshore oil fields. If Brazil meets its ambitious production targets, by the 2020s, it could join the largest oil producers, with output rivaling or surpassing traditional oil powers like Iran and Venezuela.

But achieving those goals requires companies to drill in immensely challenging offshore conditions. Pointing to the example of BP’s 2010 oil spill in the Gulf of Mexico, environmental officials here say that stiff penalties are needed against Chevron to press it and other companies to adopt strict procedures for preventing and dealing with spills.

Chevron, the foreign oil company with the largest operations in Brazil, has argued that the country’s response to the November spill, which was a tiny fraction of the size of the 2010 BP spill, was an “overreaction.”

“I’ve never seen a spill this small with this size of reaction,” Ali Moshiri, who is in charge of Chevron’s Latin America operations, told The Wall Street Journal in late 2011.

Such comments did not seem to sit well in Brazil. Authorities accused Chevron of lying about the scope of the November spill. And the news media criticized George Buck, the head of Chevron’s Brazil operations, after he and Mr. Moshiri were summoned to Brazil’s Congress to discuss the spill, questioning why Mr. Buck relied on a translator instead of speaking Portuguese.

Now Mr. Buck, an American, is barred from leaving Brazil, and a lengthy legal battle awaits him and other employees at Chevron and Transocean.

Judge Magalhães issued his ruling prohibiting the departure of the 17 Chevron and Transocean employees at the request of a federal prosecutor. “There is no doubt the exit of these people from the country, at this moment, would generate considerable risk to the investigation,” the judge said.

Prosecutors said the criminal charges in connection with environmental crimes could result in prison terms of 20 years for each defendant.

Photo

George Buck leads Chevron’s Brazil unit.Credit
Ricardo Moraes/Reuters

Kurt Glaubitz, a Chevron spokesman, said in a statement that “any legal decision will be abided by the company and its employees.”

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As Chevron and Transocean prepared to respond to the possible criminal charges over the spill, prosecutors said the companies may also face charges related to the seepage found Friday in the field, called Frade. It resulted in a sheen extending over one kilometer, or five-eighths of a mile.

Chevron said it had halted output at Frade, which has the capacity to produce 80,000 barrels a day, while the company captures the oil in containment devices. According to estimates provided by Chevron, the seepage released much smaller amounts of oil than the 3,000 barrels that leaked from sea-floor cracks at the field last November.

Nevertheless, the latest seepage points to the technical difficulties of producing oil in Brazilian waters. Big oil reserves lie under about four miles of sea, rock and salt deposits. In 2011 alone, Petrobras, the state-controlled oil company that dominates Brazil’s energy industry, had 66 leaks of oil in its operations, releasing 234,000 liters of oil, according to a report by the newspaper Folha de São Paulo.

“We cannot allow one leak, no matter how small,” said Maria das Graças Foster, Petrobras’s chief executive, in an interview here this month. Ms. Foster said she had created a working group in her office that will report to her directly about leaks or spills of any volume. “We are working to have zero leaks, none at all.”

The scrutiny over offshore oil leakages and Chevron’s handling of its November spill is also unfolding alongside other politicized debates.

Brazil remains more open to foreign oil companies than some oil-producing countries like Mexico or Saudi Arabia, and Chevron and other international oil companies have gained a foothold here. But Brazil has also asserted greater state control over its oil industry by ensuring that Petrobras oversees and gets a dominant role in new exploration areas.

Elected officials throughout Brazil are also engaged in a contentious discussion over the distribution of oil royalties. As Brazil increases its production, the state of Rio de Janeiro, where the bulk of the nation’s energy industry is based, is trying to maintain a big share of the royalties.

Rio stands to lose billions in revenue if the royalties are more equally distributed among Brazil’s 26 states.

“This accident is proof that producing states should receive a bigger share of the royalties,” Sergio Cabral, Rio’s governor, recently said of the Chevron spill, arguing that part of the royalties would be used for spill prevention and cleanup efforts.

A version of this article appears in print on March 19, 2012, on Page B9 of the New York edition with the headline: Brazil Forbids 17 at Chevron and Transocean From Leaving After Spill. Order Reprints|Today's Paper|Subscribe